A business that stems with an innovative idea and still not matured enough to make high marginal profits is considered to be a startup.
Most business and tech graduates have the option to hunt for a stable job or pursue their dreams by pitching an idea then receive funding from investors. In most of the cases, the investors share equity and become co-founders to take the startup to a successful destination.
The eCommerce startups are appreciated for the unique idea they serve to the people of a country or region with impressive products and services they have been craving for.
To think of building an online store may sound difficult but for dedicated individuals, it is a challenge awaiting its accomplishment.
To help you go through each phase of setting up your eCommerce startup, I have defined each step in detail.
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Selecting a Product or Industry
The foundation of your business in selecting the right industry and then narrowing down to the products or services you specialize.
Pursuing a startup means you have something terrific in mind, but when you research about, you will find thousands of products that are quite similar to the one you have planned.
In spite of market saturation, you can lead the competition by taking care of the following matters.
Setting Up a Product Price
The handmade craft artists often calculate the price based on the material they use and the time it tasks to finish a product, in addition to an amount a buyer is willing to pay.
Most of the retailers decide a price based on the competitors because a higher price may require them to hire a staff for answering customer queries, whereas a lower price raises a question on quality of a product and a lower return on investment.
For manufacturers, it is quite easy to set up a price since they don't have to incur the indirect cost, you better need to add the administrative costs before taking a product to online shelves.
There is a general perception that online buyers quickly place orders for the products in $200 range. Select a product that has a value for money in the eyes of the consumer.
The return on investment (ROI) is among the end goals that motivate you to build an eCommerce startup. You cannot survive with lower margins - the amount to hold as a profit from the cost.
The percentage of profit varies between industries because every business has a limitation. For example, electronics may offer you a meager 10-15% profit, whereas the digital products like hosting plans may earn you more than 50% profit.
It depends on the community you have to target in a competitive environment. To be sure about adequate margins, do contact the manufacturer or the distribution agencies you would like to work with.
Availability of Products
Most of the eCommerce startups fail to penetrate in the online industry because of offering the products that are readily available in the local markets.
Imagine, would you like to purchase cell phone covers online that are common in a local shop, where you can review them and get one that perfectly fits the model you own.
So, select a product that is high in demand but not available in the locality you aim to reach through an online startup.
Finding Manufacturers According To Your Business Model
After concluding the selection of products, get affiliated with the companies you would like to work with.
Most of the manufacturers like to dispatch products to any client without doing it through an intermediary. You can cut the commission cost a mediator earns by supplying you the products and taking them directly from the supplier. A little communication by phone or email can help hold a stock.
The eCommerce startups also select drop-shipping as their business model, which allow them to directly dispatch products from a supplier, and eliminate the need to hold stock.
Your business model defines the kind of agreement you can sign with each supplier. Just in time is yet another concept of waving cost of ordering and holding inventory, as you ask the supplier for the goods only when a customer places an order and they have to meet your requirements just in time.
Building a Perfect eCommerce Website
Deciding the product and industry is a task on your behalf, as having a startup means you are coming up with a brilliant idea and cannot hire someone else for doing this.
But, building a platform for selling your products or services is a bit technical and will require you to consult an expert developer.
For your ease, I am highlighting some of the building blocks of an eCommerce website.
It is obvious to know that without a domain name you do not exist online. It is your web address that may include your business name or a brand you want to establish.
Don't worry about purchasing a domain name, as most of the web hosting companies offer free domain registration for your startup.
Web hosting is required as you need to keep the entire data of your eCommerce website on a server that is accessible for all the internet users.
The startup businesses often go with a shared hosting plan that may not cost more than $70 a year.
Bluehost , HostGator , InMotion , and iPage are among the most reliable hosting service providers with a variety of plans to select according to the scope of your business.
An eCommerce software is an actual platform that allows you to plan an entire website structure. The free available applications include Magento Community edition , PrestaShop , WooCommerce and Shopify .
The major benefit of such a platform at your website is cutting the initial cost of developing an online store and going live soon after its quick installation.
A web development company that specializes in service eCommerce startups may quote a price beyond the available funds a small startup owns that's why it is recommended to use these softwares and do the necessary customization.
Customize Your Store
Customization is what makes you look different in the online spectrum where most of the stores use the same platform as yours. There is no harm in availing the facility of a free eCommerce platform as you are given the freedom to purchase themes and plugins that set you apart from the competitors.
There are tutorials to get through the customization, but for a professional approach, you need to contact competent developers to make the store appearance consistent to your business idea and concept.
Having a Brilliant Web Design
Web designing is not to be confused with the web developing as there is a major difference in laying foundations and structure of a building, and then planning exterior designing with different patterns of an emulsion to beautify it.
The free eCommerce softwares may allow you to go live with a domain name and get traffic, but without a brilliant design, you will fail miserably to convert those visitors into customers. The online buyers are attracted towards an appealing website and stay until they are enjoying browsing through different products and categories.
A well-experienced web designing company can help you tackle the issues in the design that are increasing cart abandonment because there is no definite tool or plugin that can make your web design more appealing, attractive and engaging.
You can count on the successful stores that have major interests in designing a logo that conveys more than just a business name. You can consider one for your startup as well.
Building a startup is a tough job as it requires a passion to select a product and work on it until the concept matures, whereas having an eCommerce website is also important. You can have it within 2-3 working days to reach your audience, and continue with improving the platform for an enhanced shopping experience.
The above guide will surely help you complete each phase successfully in setting up an online business.